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The PMLA at a Crossroads

The Prevention of Money Laundering Act (PMLA)

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Explore the history and impact of the PMLA, a law that has strayed from its original purpose.

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The Prevention of Money Laundering Act (PMLA)

The Prevention of Money Laundering Act (PMLA), 2002 was created to stop the flow of illegal money generated through international drug trafficking. This money posed a big threat to the economy of many countries. People realized that if this black money from the drug trade mixed with legal money, it could harm the world economy and the sovereignty of nations.

The background to the law is important

The United Nations got worried about this issue and in 1988, they held a convention against illegal drug trafficking. They asked all countries to take quick action to stop the laundering of money from drug crimes. Seven major countries then formed the Financial Action Task Force (FATF) to figure out how to stop money laundering. In 1990, the United Nations General Assembly made a resolution asking all countries to make laws to prevent drug money laundering.

India used the FATF recommendations to create the Prevention of Money Laundering Act in 2002. But it didn’t become active until 2005. The main focus of this law was to stop the laundering of drug money.

The law on money laundering

The PMLA focuses on the money that comes from crimes and is then laundered. Not only the people involved in the crime, but also those who help with the laundering process can be punished under this law.

However, the PMLA has changed over time. It now includes many offenses that have nothing to do with stopping the laundering of drug money. The original purpose of the law was to stop the laundering of drug money, but now it covers a wide range of offenses.

The main goal of the PMLA was to stop the laundering of black money from the drug trade and protect the world economy. But now, it has lost its original focus and includes many other offenses.

The PMLAs enactment

<p>Back when the PMLA was created, India’s Parliament passed it under Article 253. This article gives Parliament the power to make laws to follow international agreements. Basically, if an international group decides on something, India can make a law about it. The law was supposed to focus on money laundering related to drug money. But over time, the law has been changed and now includes other crimes that already have their own laws.</p>

Changes to the law

<p>Looking at the schedule of crimes covered by the PMLA, it’s clear that the law has strayed from its original purpose. The rules in the law were meant to target serious criminals involved in drug trafficking and money laundering. But now, these rules are being used for other crimes as well, without any adjustments. This means that even crimes that don’t pose a big threat to the economy or national security are being treated the same as serious drug crimes. For example, the Prevention of Corruption Act, which is meant to stop corruption among public servants, was added to the list of crimes covered by the PMLA in 2009.</p>

Presumed guilty until proven innocent

<p>One of the biggest issues with the PMLA is that it assumes anyone accused under the law is guilty until proven innocent. In most legal systems, the opposite is true – a person is innocent until proven guilty. But with the PMLA, an accused person can be denied bail and kept in jail for years without a trial. This is because the law says that a judge can only grant bail if they are sure the accused is innocent. This puts a lot of pressure on judges and makes it hard for accused individuals to get a fair trial.</p>

The bail provisions

Let’s talk about the bail provision in the PMLA Act. It’s a big deal in India right now. A while back, the Supreme Court said it was against the Constitution. But then Parliament quickly fixed it up with some changes. Another court said it’s all good now. But here’s the issue.

What’s the point of the Act?

The whole point of the PMLA Act is to stop people from laundering black money and messing up the economy. But what about smaller crimes that are also included in the Act? The judges basically said that deciding which crimes to include is up to the lawmakers.

The judicial perspective

When it comes to bail in PMLA cases, the courts seem to be very technical. Back in 1978, Justice V.R. Krishna lyer talked about how important personal liberty is. He said that denying bail should be a big deal and not taken lightly. The Supreme Court has come a long way since then.

Vinay Kumar is Marketing Professional turned Entrepreneur, believes in turning ideas into reality.

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